Tracking Is Knowing
A common concern I’ve heard from clients is:
“we make good money, so why don’t we have anything to show for it?”
The answer usually lies within their spending habits. In order to understand where your money is going, you have to track it.
Some of the easiest expenses to track are fixed expenses that many folks have chosen to automate and therefore don’t pay much attention to what they are actually paying. Higher cost expenses that eat up more and more of your budget include insurance, phone, cable and internet services.
Cutting Costs & Pulling the Plug
The goal is to see if you can maintain or even improve your existing coverage or services while paying less for it. For example, in years past, I would always be able to renegotiate with our cable provider to maintain our existing pricing or lower it when the contract came up. This year, however was an exception. My cable provider was not interested in negotiating to provide us with any significant savings and in fact our cost rose fairly significantly when we canceled one of our existing services (phone) and went from 3 services to 2.
Over the past year, I’ve seen the discussion about “cutting cable” come up over and over again on my Facebook feed so I started to pay more attention. It turns out that almost everyone who cut the cable cord didn’t miss it at all and were saving a bundle as a result. So, after doing my own research and discussing it with my husband, we decided to finally cut the cord and switch over to streaming services such as Hulu Plus, Amazon Prime and Netflix.
Wow! Unexpected Savings!
Since we also switched to OOMA for our phone service, our cable/phone/internet expense has gone from $200/mo to $110/mo, a savings of nearly $1,100 per year, which I am reallocating to our vacation fund!
In making the switch, there were some upfront costs, such as buying the TV antennas as well as the streaming devices, but we will break even on those expenses after the first 3 months of savings. We can still watch all of the same shows (minus some live sporting events), and are paying much less. This is just one example of how following the crowd can be a good thing.
Final Thoughts: Bring Joy to Your Life!
I am constantly re-evaluating our expenses to see how we can decrease the costs of items that aren’t really important to us so that we can reallocate that money to areas of our life that are important, like taking a vacation! I encourage you to try this as well. You might be surprised to find out that your hard earned money might be going towards things that don’t bring all that much joy to your life and could be better spent elsewhere.
About the Author
Kelly Stanley, CFP®, MBA is a Certified Financial Planner and a Certified Wealth Advisor Representative offering securities and financial advisory services. You can reach her at Kelly@TheCogentAdvisor.com or 312-382-8388.